Nicolas Barnard and, below, Geraldine Hackett talk to the key players in the troubled borough.
Tony Elliston's room in Hackney town hall has an appropriately down-at-heel feel for the office of the chief executive of England's most troubled, most deprived authority, A fug of Benson and Hedges accumulates as Mr Elliston puffs his way through interviews in the large but unflashy room overlooking Mare Street. Hackney's notoriously high council tax isn't being poured into a palace for the boss.
This is the base from which the 45-year-old Londoner has controversially attempted radical surgery on the council's chaotic services, fended off the unwelcome attention of a Government education "hit squad" and fashioned some kind of understanding with ministers.
Hackney was an obvious candidate when Labour pledged to get tough on failing local education authorities in return for offering LEAs a role in raising school standards. Mr Elliston does not believe it was a fair choice.
There's something of the wounded child in his reaction to the criticism of his work by the improvement team leader Richard Painter, as if he sees it as a personal attack.
He sees Hackney as a borough in transition, with results so close he can almost smell them. He's cheerfully blunt about what has happened in his two-and-a-half years, and the state of the council he inherited.
"People have left the authority and we weren't sorry to see them go. It was a clear-out," he admits.
Labour councillors were planning something more gradual when they interviewed Mr Elliston in 1995. He came up with Transforming Hackney, a blueprint for improving services. But when the Labour group split last year and the council became hung, he seized his chance to do something more radical. He admits he finds organisational change "fascinating" - hardly a phrase to comfort critics.
Hackney has been streamlined, with 25 departments slimmed down to nine, a new tier of executive directors introduced to steer broad policy and various services either privatised or put out to tender. Only two service heads remain from before Mr Elliston's time.
It has all taken a year and critics say education has been ignored in that time. The service has been without a permanent head since Gus John went on sick leave in January 1996. Mr Elliston disagrees. But it's perhaps telling that when he enthuses about the change he has wrought in Hackney, it is to street-cleaning, housing and the condition of the estates that he almost apologetically points.
His background is not in education. He has been trained in the more internal workings of local authority, from his first job in the district audit office to stints at Newham as a finance officer to running central services at Brent.
The structure he has introduced in Hackney is not unusual. But the question remains whether it is the right structure for an authority so resistant to change - and whether it should have been imposed at a time when the council had no one to steer such a desperately disorganised education service.
One highly experienced senior local government officer says: "I have a lot of sympathy with what he's trying to do - it's worked in other places. But you've got to keep services running and you've got to make sure the most important things like education are secured. Part of the anxiety is the extent to which this builds on an organisation which is in some disarray."
Mr Elliston says: "I believe changes will now happen very quickly. We're expecting to make vast inroads in the next six months."
But will that include education?
HEAD OF EDUCATION
Richard Painter does not conceal the fact that the level of opposition to his team makes it impossible for any substantial improvements to be made to the Hackney education service.
The ruling coalition, a strange mixture of Labour party rebels, Liberals and Conservatives, is not convinced of the need to work with the team at all.
In fact, the only sign of progress is that the council has agreed to appoint a director of education at a salary higher than the executive officers responsible for services across the council.
Even Mr Painter's diplomatic skills are stretched to find anything positive to say about the leaders of the political coalition or their education spokespeople - the parties have refused to nominate a chair of education (the chair currently rotates between two groups) in order to provide a level of stability.
He had to get used to abuse and hostility on visits to Hackney Downs, the boys' comprehensive he finally recommended for closure, but is still taken aback by the personal nature of comments that he gets from councillors.
Ministers appear to accept that they have few powers to deal with the Hackney situation until the Education Bill becomes law next summer.
They appear to take comfort from the prospect that local elections in May will return Labour to power, spelling an end to the management structure designed by the chief executive.
In the meantime, the improvement team continues to work in impossible circumstances. The chief executive, Tony Elliston, defends a structure that the team believes can only make life difficult for any new director of education.
Mr Painter argues that the structure favoured by Mr Elliston is not one to be imposed on a council where the education service at least is in a poor state.
Despite the importance Mr Painter attaches to the recruitment of a director, he has not been able to insist that his team draw up the shortlist. The final choice will be exercised by councillors.
His reason for staying in Hackney is that there are gains to be made in supporting schools. The chief executive has agreed to temporary appointments of staff to respond to schools in the area of special needs and budget information.
The team will draft the educational development plan and work with the new director.
Ministers considered Mr Painter qualified to head the first ever improvement team - the one that closed Hackney Downs - because of his local government experience as chief executive in NE Essex (now Tendering) and the Medway Towns. He is currently chief executive of the ADT City Technology College in Wandsworth and has worked for ADT, the electronic security services group, for the past 10 years. ADT has now become part of the Tyco group.
Mr Painter believes his solutions to Hackney's problems are accepted by officials from the Department for Education and Employment, heads and governors, experts in the field, and the teacher unions.
The difficulties lie with those who don't agree, he says.